On May 14, Acxiomannounced its intention to acquire LiveRamp, a "data onboarding service," to the tune of $310 million in cash. Several Forrester analysts (Tina Moffett, Susan Bidel, Sri Sridharan, and I) cover these two firms, and what follows is our collective thinking on the impending acquisition after having been briefed by Acxiom's leadership on the matter.

The acquisition sets Acxiom up to displace traditional MSPs. LiveRamp has built integration relationships with four of the biggest managed service providers (MSPs): Epsilon, Equifax, Experian, and Merkle. Acxiom is claiming agnosticism, and it has told us that it is "open to many ways of proving neutrality, including contractual commitments, [and] third-party audits." The firm considers the acquisition "an evolution of Acxiom’s Audience Operating System (AOS), which was launched to connect the ecosystem of marketers, technology, and media more tightly together, and make every part of that ecosystem work better." But when we project out a few years, we have a hard time seeing how marketers will justify a standalone customer relationship management (CRM) database when they could, for example, port their POS and order management system (OMS) data directly into AOS, and use that as their "customer marketing platform-as-a-service."

On the flip side, is Acxiom going to divest its services business? For the past two years, Acxiom has been undergoing a steady transformation from a services vendor to a technology one. It's a smart move that will future-proof the company in ways that some of its traditional competitors are struggling with. In fact, when we asked how the combination of LiveRamp plus AOS differs from a data management platform (DMP), the product team told us: "We are not a DMP, and it is a critical part of our strategy that we are not seen as a marketing application — just the connections between applications. DMPs typically provide a number of features like analytics, media execution, a central user interface for all marketing functions, data modeling, etc. — we don’t focus on any of that. We just move data between marketing applications – including DMPs." But what does this mean for the myriad marketers who have invested heavily in their relationship with Acxiom over the years? Can they expect those marketing databases and services to continue? And if so, then we must ask again: How can Acxiom be an agnostic technology vendor at the same time as it is supporting hundreds of marketing databases?

Data onboarding, while a compelling offering, isn't front of mind for most marketers. LiveRamp fills an interesting gap in the marketing technology ecosystem: data onboarding. The idea is that, using LiveRamp, marketers can load their own CRM data into a multitude of digital platforms (site optimization, media buying and measurement, and mobile advertising, to name a few) to enable retargeting and suppression of their own customers in online messaging. While this could be a powerful tool, nearly every data management platform promises similar functionality, as do several of the traditional database MSPs. We're not sure that marketers will see the value in using Acxiom as their clearing house for CRM data into the myriad systems and applications they use today.

First-party data privacy and security concerns are growing, not shrinking. Overwhelmingly, marketers we work with are looking for vendors to help them secure their first-party data. While Acxiom is working hard to cement its reputation as a privacy-conscious data broker, it must still contend with legislators and regulators who are extremely critical of its business model. With this acquisition, the firm is asking potential clients it has never worked with to trust it with massive amounts of personally identifiable information (PII), keep that data secure, and manage how it's shared with a whole host of other vendors. While the marketing organization might be excited about some of the opportunities this offers, we're not sure that privacy and compliance teams will be ready to take the leap.

Finally, the acquisition will enable one of the first truly cross-platform data integrations at scale. Even with all the questions that remain, one thing is clear: By scooping up one of the first, most widely partnered, best-known data onboarding vendors, Acxiom has vastly extended the capabilities of its entire AOS ecosystem. It will soon be able to integrate more device identifiers, push to more media platforms, boost Abilitec's reach across platforms, enable true cross-channel marketing measurement, and even begin to start testing new uses of its AboutTheData portal (imagine it as a global preference management service!). This could change a lot of executional processes for marketers, and collapse the entire marketing services vendor landscape dramatically.

So, all this said . . . what's our take? Well, we recognize the potential impact of LiveRamp on the AOS ecosystem, and we see the value of the integration capabilities for marketers. We know that it puts Acxiom a step further down the path of becoming the technology that connects all of a marketer's channels, without being in the messy and expensive services business. But is that worth $300 million? Our collective answer is "no." It's simply too high of a price and too high of a revenue multiplier for a technology that Acxiom may have a hard time selling.